• Cancellation of flat booked under subvention scheme

I booked a flat in Noida extn in Dec 2015 under subvention scheme ("no emi till possession"). I payed 7% down payment and availed 80% loan. Till date I have payed ~2/3rd of the total flat value to the builder. 
As per the agreement builder was supposed to deliver the flat by mid-2019 but I spoke to them yesterday and they said they will be able to deliver the flat by end of 2020. 
The grace period of the subvention scheme got over in dec 2017 and builder promised to reimburse the pre-emi but till date has payed only 3 installments (out of the 8 months). 
Because of some serious financial problem with my family i wont be able to continue with the flat. I spoke to the builder and he said they cannot cancel the booking especially booked under subvention scheme.
As per the agreement (which was pre-RERA time), if I cancel the booking the builder will forfeit the “Earnest Money” (7% down payment) and “Non-refundable amount” (interest payed by the builder). 
I don’t know if I should go ahead and cancel the booking because it will cause huge financial loss but I am not in the position to continue it as well. Can you please suggest the most viable way for this.
Asked 9 months ago in Property Law from Noida, Uttar Pradesh
Religion: Hindu

Hi, the project comes under RERA , if the builder has not Received the OC ( occupation certificate) .. You can ask the refund as per the clause of builder buyer agreement.. The builder has legal liability to refund you the amount after fofeiting of the 7percent of down payment..It is advisable to issue him a legal notice for the refund of amount.. If he fails to do so you can file a complaint at RERA

Hemant Chaudhary
Advocate, Gurgaon
4100 Answers
23 Consultations

4.9 on 5.0

You can find a new buyer for the flat and the flat can be transferred.to the new buyer at some increased price you shall earn gain also you shall clear your loan also and you don't need to suffer.loss on cancellation of the booking.

Alternatively wait for mid 2019 when time get over file.consumer complaint for compensation from builder and in that negotiate with builder to refund total amount as there shall be delay in the project as agreed so.agreement can be cancelled and refund can be seeked

Shubham Jhajharia
Advocate, Ahmedabad
14304 Answers
57 Consultations

5.0 on 5.0

You should serve legal notice to the Builder asking him to refund the entire amount along with interest and compensation, owing to the deficiency of service delaying possession by not completing the work on time.

If he fails to repay the entire amount, along with interest and compensation within 15 days of receipt of legal notice, you can proceed to file a complaint in consumer court for deficiency of services and unfair trade practices adopted by the builder.

Siddharth Jain
Advocate, New Delhi
3235 Answers
36 Consultations

5.0 on 5.0

Dear Client,

Any under construction project is compulsory to be registered with RERA, so RERA jurisdiction will prevail.

Don`t show your inability to continue with project but due to default of builder, you are cancelling the agreement and seeking refund with interest.

IF builder fail to do so, complain to RERA and consumer complain for compensation.

Yogendra Singh Rajawat
Advocate, Jaipur
8999 Answers
8 Consultations

4.7 on 5.0

If builder delays delivery of possession beyond date mentioned in agreement you can cancel booking seek refund with intetest

3) builder cannot forfeit your advance payment if there is delay on his part

4) if he refuses file complaint before RERA abd seek refund with intetest

Ajay Sethi
Advocate, Mumbai
59929 Answers
3622 Consultations

5.0 on 5.0

1. file a complaint with RERA tribunal for delay in handover of possession

2. you can say that as there is delay, you do not wish to continue in the project and seek full refund with interest and damages

3. in this way you wont have to pay any penalty if you cancel the agreement. Because you are cancelling booking as there is delay by builder, which is not your fault

Yusuf Rampurawala
Advocate, Mumbai
3700 Answers
16 Consultations

5.0 on 5.0

1. The seller can not forfeit the whole of the earnest money even if the agreement is canceled by the buyer.

2. I can not comment on the restrictions imposed by the said scheme as the same is not shared with me but apparently it can not relinquish the rights of a party available under general law.

3. So send him a legal notice seeking refund of your money .

4. If he does not then you can file a case before the consumer forum wherein you would get full refund along with damages, compensation and interest.

Good luck.

Devajyoti Barman
Advocate, Kolkata
16088 Answers
222 Consultations

5.0 on 5.0


You don't take this on you and file a consumer court against builder for not

giving flat on time, mentioned in agreement.

You pay 2/3 to builder, so it's huge loss, arrange money from your relatives and friends

and after taking possession, sell it.

Tarun Agarwal
Advocate, Jaipur
633 Answers
2 Consultations

4.9 on 5.0

Any act of cancellation has to be dealt strictly in accordance with the stipulations contained in the builder's buyer agreement.

If it is the builder who has failed to adhere with the agreement and the subvention plan, you should cancel the booking citing the inability/default on the part of the builder and seek full refund of your entire deposit.

Send a legal notice to the builder first seeking strict adherence to the sub-vention plan. Depending upon the reply your receive, shape your future course of action.

Vibhanshu Srivastava
Advocate, New Delhi
8092 Answers
111 Consultations

5.0 on 5.0

Your case is bit different this is not a simple application for purchase of flat you have already tripartite agreement with the Builder and banks and Bank have financed amount to the Builder and builder was being the EMI or interest on that in case of cancellation of the flat the Builder has to pay back all the amount to the bank on your behalf and resell the flat or you have to pay the entire amount to the bank which is paid to the Builder. Both the situations are difficult to complete for.

Vimlesh Prasad Mishra
Advocate, Lucknow
4721 Answers
11 Consultations

4.9 on 5.0


Since it is the fault of the builder that he is unable to give the possession of the flat on time and it is due to this reason that you are going for cancellation of the flat.

You may go for cancellation of the same on the ground that the builder is not giving the possession of the flat as per the agreed terms and conditions.


Anilesh Tewari
Advocate, New Delhi
14921 Answers
209 Consultations

5.0 on 5.0

If in your purchase agreement cancellation clause is written then you cab cancel the flat as per that condition and 7% amount of down payment will be forfeited.

Abhilasha Wanmali
Advocate, Nagpur
894 Answers
1 Consultation

4.8 on 5.0

The builder's condition of forfeiting the entire amount if you opt for cancellation is illegal.

He cannot refuse to return the booking amount especially if you choose to cancel the booking due to the inordinate delay by the builder.

You communicate your decision to cancel the booking citing the same reason i.e., blaming the builder for the delay and also his default in payment of the EMI amount to the bank which are violations of the sale agreement condition. You can send this communication by registered post and in the same notice you demand refund of entire booking amount.

Let him give a reply after which you can approach RERA and also consumer court for relief and remedy.

T Kalaiselvan
Advocate, Vellore
50074 Answers
591 Consultations

5.0 on 5.0

1. Initially serve a lawyer's notice for cancellation of the agreement to the builder asking him to refund the entire amount with compensation and cost of legal notice due to the default of the builder.

2. If he does not meet your demand then sue him under RERA for refund with compensation and cost of litigation.

3. Builder cannot forfeit a single penny when agreement is cancelled due to his default.

Ashish Davessar
Advocate, Jaipur
25683 Answers
730 Consultations

5.0 on 5.0


If there is delay in possession and change of lay out etc. or violations of agreement by the builder, you may cancel the cancel the agreement and ask for complete refund.

Ganesh Singh
Advocate, Delhi
2516 Answers
5 Consultations

4.5 on 5.0

This is my response to you:

1. Has the OC and CC come?

2. If it has not, you can still file a complaint to RERA;

3. Otherwise approach the consumer court;

4. The builder has delayed the project and also not reimbursed your properly for the pre-emi;

5. Therefore first send a legal notice;

6. Engage services of a local lawyer and let him/her verify and vet your documents.

Gowaal Padavi
Advocate, Mumbai
1599 Answers
2 Consultations

5.0 on 5.0

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